THE STUDENT GOVERNMENT REPORT ON TUITION INCREASE

The Student Government of KIMEP appreciates the official response from the KIMEP Administration (letter of April 4, 2007) on issues concerning tuition increase.
The response is informative, official, and respectful. The Student Government and the Administration together are building a solid groundwork for information-sharing and communication that will set a precedent for future student governments and administrations to observe and follow. The SG also understands this to be an important part of the accreditation process. The SG believes that eventual accreditation is a shared goal among students, alumni, faculty, staff, and even many of the citizens of Kazakhstan. This report is a sincere effort to continue, in a communicative manner, to perform a satisfactory representation of KIMEP student interests as well as to support reforms required by the accreditation bid.

The Student Government has analyzed the Administration's response thoroughly and has produced the following comments and observations. The enumeration scheme corresponds to previous documents:


1.

The Administration states: “Student Government representatives participate in KIMEP’s Budget and Finance Committee.” However, the work of the SG in these committees took place in the Fall 2006 semester. It should be clear that the Administration is referring to meetings with a student government they themselves invalidated. The SG believes that the Administration cannot, on the one hand, nullify a student governing body due to fraud but, on the other hand, argue that this body's earlier decisions should remain valid in the event that they are supportive of the Administration's own position(s); thus, the SG questions the ethical and logical consistency of the Administration’s stance on this issue. In the future, the SG would recommend that critical decisions made by a previous, invalidated body be brought forth again for fresh review by the new, legitimate Student Government.

Regarding the representative viability of the General Assemblies of KIMEP students and parents, they certainly do not compare in numbers (200 to 500 persons) to those events recently organized by the Student Government, which consisted of a petition of more than 2000 student signatures against the planned tuition increase and its corresponding demonstration of more than 700 students on campus. This demonstration was covered by multiple news outlets.

Just as important, the parent/student meetings have proved to be ineffective in that students will not stand up and voice their concerns about the budget or the tuition increase. This is due to a common belief among KIMEP students that raising troublesome topics at such meetings will affect their grades and perhaps even lead to an expulsion from KIMEP. This very point has been constantly communicated by student leaders to the SG during negotiations.

In response to this fear, the SG would like to remind students that the Administration has been very professional concerning this matter. At many other Kazakhstani Universities, SG Leaders and other involved students would most probably experience problems in the form of personal threats, unfair and negative influence on grades, a loss of dormitory privileges, and perhaps even threats of expulsion from the university. The Administration has stated that no such thing will happen at KIMEP. And yet it must be noted that this fear remains a significant issue because it works to decrease the overall effectiveness of these meetings as a means of communication between students, parents, and university staff.

And although the Administration has pointed to recent survey results provided by the Ministry of Education that indicate a 97% approval rating, the SG respectfully insists that information collected through its own survey also be considered by the Administration (due to its structure, methodology, and results) as a telling indication of student opinion.

Finally, if the General Assembly of KIMEP Students and Parents is to be considered a serious gathering, its scheduling should be communicated well in advance and not in the ad hoc manner in which the Administration has sometimes gone about it - informing the students by campus board ads and emails only two or three days prior to the event. It is also rare, for whatever reasons, that parents will attend these events. In such a case, it makes sense to facilitate their attendance as much as possible. This entails that these meetings be held on regular (if infrequent) dates and with as much forewarning as possible.
2.

The Administration has interpreted the SG's original point in comment #2 to be only a questioning of the reasons behind the tuition increase. And while this is certainly one part of a complete response, they have failed to elucidate a concrete position on the students’ petition and, following this event, the large demonstration. The SG recognizes recent steps taken by the Administration to publicly explain the need behind the tuition increase; all the same, the SG would like to bring to attention these protest events as an unmistakable example of the problematic but necessary consequences that arise from poor information-sharing policy and/or its implementation. The SG believes that an administration who both understands the opinions of its students and can effectively communicate its own position is superior to one that cannot or does not.

As for the reasons behind the tuition increase, the Administration’s response states the following:

”KIMEP is becoming a world-class university and must develop its educational delivery system to comply with international accreditation standards, which will help ensure KIMEP maintains its quality. The proposed tuition increase addresses critical needs in order to continue on the path to accreditation....”

The Student Government wonders why the Administration, when questioned concerning the 20% tuition increase, has neglected to reference the KIMEP Strategic Plan of 2005-10 (adopted by the Board of Trustees in April 2006), which clearly indicates that for 2007-2008 the tuition increase is to be 15%. For 2008-2009 and 2009-10, it was projected at 12% and 11% respectively. From this, two questions must be raised:

1. How did the Administration originally come up with a 25% increase in tuition for the current 2007-08 academic year although the Strategic Plan, adopted by the supreme governing body of KIMEP in 2006, set it at 15%? This is a startling 10% difference. Can the Administration simply add an extra 10% to tuition with neither the Board of Trustees approval nor an in-depth, public explanation to justify its actions?

2. The Strategic Plan of 2005-10 adopted in April 2006 was altered by the Administration in April 2007 with major changes in the Tuition Fee Increase items:



2007-2008
2008-2009
2009-2010
Strategic Plan
(April 2006)
15%
12%
11%
Strategic Plan
(April 2007)
25% (original)
18% (final)
15%
15%

Will the Strategic Plan continue to be altered every year? In essence, this diminishes the seriousness and viability of the Strategic Plan.

The SG believes that the Strategic Plan is not a casual document in its production or alteration, and likewise serious amending should not be constantly required. At best, these kinds of changes point to either an analytic failure during the creation of the document or a failure in the management-level implementation of the objectives it outlines. The SG believes that it is a difficult argument to sell that students should be held financially responsible in either of these situations.

Also pertinent is the wording of the Strategic Plan 2005-2010 (dated June 2005):

“In the view of senior administrators and the Board of Trustees, the most important target for KIMEP is sustained financial viability....There are three important constraints. First, the 2009-2010 number of full-time registered students for the day-time academic programs is capped at 4,000. Second, faculty and staff salaries must be increased to competitive levels. Third, tuition increases cannot exceed 15% per year, on the average...”
The SG would reiterate that current trends indicate that recommendations and achievement structures within the Strategic Plan are being ignored and/or frequently changed. This is a distressing problem not only because of its financial consequences for students, but also because it means that KIMEP runs the risk of operating too far outside the predicted safety bounds outlined in the Strategic Plan. Once there, it will be unable to utilize the analytic foresight of the Strategic Plan as guidance for its many critical decisions. That is to say that every decision made that deviates from the Strategic Plan works to reduce its wisdom, effectiveness, and relevancy for KIMEP's future.
3.
When reading many statements made by the Administration concerning its policy, one will arrive at the understanding that a Western “mode of operation” is a critical objective for KIMEP. The SG asks why the KIMEP Administration is not enacting the required reforms in a consistent, across-the-board manner.

For example, external financing is around 5% of the budget. Most comparable Western universities have five to six times more than this. Recently, the Administration pointed to the fact that grants and scholarships make up 30% of Western Universities' budgets. The SG does not disagree with this kind of financial-aid budgeting at KIMEP; instead, the SG questions why the Administration fails to come up with external financing and fund-raising that is present in Western universities, which would immensely reduce the current financial burden of students. (This issue is somewhat connected with the non-academic revenue and “Tax Exemption Status” of #8 and will also be addressed there.)

The SG believes that the Administration cannot merely point to "cultural difficulty" to excuse its own problems in acquiring external financing while, at the same time, demanding that students deal with the financially difficult aspects of enacting the Western Model. This is to say that the Administration must be consistent and progressive with its realizing of the Western Model. This emulation must not happen only in places that are convenient and profitable for the Administration. If the Administration is asking sacrifices of the students, the Administration needs to do the extra work themselves as well.

Regarding the Fixed Tuition Fee challenge, the Student Government is pleased to see that the Administration has acknowledged how vital it is for students to have a fixed-tuition-fee contract given the singular position of KIMEP in Kazakhstan. With the highly qualified Finance Faculty of the Bang College of Business, the Student Government is ready to set up a task force to study this issue and work out possible proposals to convert KIMEP to fixed tuition starting the Academic Year 2008-2009. And yet the SG would like to express its mild hesitation in pursuing this, because even if the SG came up with a working, satisfactory model, the Administration couldreject it on the grounds of not being "Western", as happened when questions of credit borrowing or tuition revenue bonds were raised.


4.
The Student Government does not question the legality of the New Building Tender. Instead, the SG is concerned that the Administration has failed to present a convincing argument that $1000 per meter square is the fair market price; moreover, the New Building construction documentation has not been provided for an independent review. In light of this, the SG would like to bring up the following:

1. Is it fair that KIMEP Students pay $1000 per square meter while major business magazines and distinguished real estate experts indicate that the highest possible per-square-meter price, in the most prestigious districts of Almaty, is below $700?
2. The New Strategic Plan indicates that KIMEP will be spending around 4.5 to 6 million dollars on Capital Expenditures (i.e. a new dormitory and other major construction projects). In light of the vast sums of money involved in this development, the Student Government proposes the establishment of a Committee of Experts from distinguished construction companies to look into the New Building construction documents and the coming construction projects.

Regarding a long-term cost allocation for a loan repayment, the Administration has referred to the “unique” situation of KIMEP being a non-profit JSC of which the Government owns 40%. This situation means added difficulty in authorizing different forms of financing. But this does not seem to be an up-to-date rendition of KIMEP's ownership structure. The SG is under the impression that this ownership structure is undergoing a substantial change as per the demands of international accreditation. All financing issues must be raised again when the new ownership structure is established (presumably soon and one that will not include the Government as a significant owner).

If the Administration would like to make any official comment regarding this upcoming change and what it means for financing plans, the SG is all ears. In any case, it seems that any limitations brought on by the current ownership structure will soon be irrelevant to financing decisions. The SG hopes the new legal form of KIMEP will open the doors to loans (a normal thing for Western universities) and tuition revenue bonds.

Finally, the SG does not understand why a more fair and longterm cost allocation necessarily is, in the eyes of the Administration, an action that would “defer the cost to future generations of students and minimize the contribution of current students...” The SG believes the Administration is overlooking a viable middle-ground. Isn't the opposite of that statement exactly what is happening with a large temporary increase in tuition? That is to say current students are footing the bill, and future students, after CAPEX has subsided, will contribute next to nothing to growth.

Simply put, 4000 current students are being required to pay for Capital Expenditures that otherwise could have been allocated among the coming tens of thousands of people. The SG does not want to allocate all costs to future students, only to work towards a more sane repayment schedule. The current cost allocation does not match the stated policy of the Administration that “each class of students participate in the growth of KIMEP.” The SG hopes to see fairer possibilities in cost allocation beginning with the transfer of ownership of KIMEP to its new Foundation.


5.

Although there remains a few bothersome issues with Medical Service on campus, the SG is currently satisfied with the Administration's response and is appreciative of the information.


6.

The SG regrets to see that the Administration has misinterpreted this point. The SG argued that KIMEP, and not its students, should pay for the increase in scholarship money. The SG said nothing about cutting scholarships for needy students, neither did the SG advocate for less scholarship money.

The SG is unsatisfied when the Administration prefers to excuse a shortcoming by leaning on cultural peculiarities of Kazakhstan; however, the SG recognizes that laying blame in this case can resolve little. And so the SG is encouraged by the prospects offered by the Office of Advancement, and, in turn, encourages the Administration, on behalf of and in the interests of all students of KIMEP, to aggressively pursue these external sources of funding.


7.

The SG is appreciative of the clarification on salary increases. At a future time, perhaps issues of employee performance and how it is qualified and quantified could be discussed. For the present, the provided information is ample.

8.

In its response of April 2007, the Administration states:

“KIMEP is a tuition dependent university, which allows KIMEP to be income tax exempt. Increasing or growing non-academic revenue would jeopardize the tax exemption status and would cost KIMEP over $1,000,000 annually.”

The SG is confused by the wording of this response when compared to the observation made by the Spring 2007 Self-study for accreditation, which reads:

"If the quest for tax exemption fails, the Institute will be able to absorb these resources through its restricted contingency fund as these funds are being set aside until tax exemption passes the government inspection process and is proven...."

The SG would like a clarification on tax exemption status. It is clear that by Winter and early Spring 2007 KIMEP had not achieved this status. Why does the Administration's response of April 2007 indicate that is already has?

In the case of failure, immediately working towards increasing non-academic revenue must be a major priority.

In the case that it has achieved this tax exemption status in the last month or so, the SG, in the future, would like to be involved in drawing up fund-raising schemes that maximize the benefit of the tax exemption status weighed against the revenue stipulations imposed by it; however, the first step must be to receive some clarification on the tax exemption status.

And to quote the same section in the Self-Study further:

“Even without tax exemption, government subsidies or significant external contributions fromalumni and friends KIMEP has maintained a balanced budget, improved operations andcontinues to offer an American style quality institution in a region of the worlddeserving one."

The SG believes that the above words in bold may be offering misleading information to the accrediting body since KIMEP has never had substantial government subsidies or significant external contributions from its alumni and friends. In fact tuition fees have been a solid 90-95% of its revenue. Although the accrediting body may be aware of this, it is suggested that these lines receive review and possible clarification as any misstatement in the Self-study can affect KIMEP's integrity and accreditation bid.


9.
The Administration has not denied the statement concerning faculty turnover that was shared by Dana Stevens, the Head of the Accreditation Committee. In addition it has not provided a concrete, all-inclusive Faculty turnover rate for KIMEP as well as for, in particular, the Bang College of Business. The June 2005 version of the Strategic Plan 2005-2010 projects for the year 2010 the following:

“Faculty turnover has been reduced to 30% per annum, providing a permanent faculty with sufficient institutional memory to assure program continuity. Staff turnover is minimal, providing well-trained administrative support with increased efficiency.”

From this statement, it is implied that turnover is currently above 30%. It is also easy to see that the Administration recognizes the problems caused by high turnover rates – lack of institutional memory and program continuity. And yet there does not seem to be a significant improvement in this situation. The Bang College of Business has a tradition of changing its dean almost every semester. This remains a crucial problem for students as they cannot expect to see their professors the following semester.

The SG applauds the Administration's efforts to reduce this turnover rate by upgrading the facilities of the institution. The SG recognizes the Administration's current policy of investing in improving facilities as opposed to simply increasing faculty salaries. The SG also recognizes the high level of student satisfaction recorded in the Faculty Teaching Evaluation Surveys.

But the Administration also states:

“Recruiting highly qualified International faculty is always a challenge compared to the low wages of other more developed countries. Foreign faculty and staff that come to KIMEP are interested in helping change society and helping KIMEP realize its goal to become internationally recognized.”

The SG would like to go one step further. When Foreign Faculty leave KIMEP, have they lost their interest in changing society or in helping KIMEP realizing their goals? If so, why? The Administration seems to indicate that the biggest concerns of KIMEP faculty are wages and facilities; however, there are interesting items in the 2006 Report on Faculty Satisfaction Survey - specifically, in clusters B1, C1, and C2. The exact numbers, but not necessarily the optimistic wording, will be repeated below:

B2 - Day-to-day faculty activities:
Only about half (51.55%) of faculty members are content with the professional environment in which they work.

C1 - Promotion, tenure, and advancement:
Less than half (49%) of faculty members are satisfied with the level of fairness and clarity of KIMEP standards and procedures.
C2 - Promotion, tenure, and advancement:
Less than half (48%) of faculty members reported their satisfaction with the career perspectives at KIMEP.

These problems, the most evident of those detailed in the Faculty Satisfaction Survey, do not seem resolvable simply with the building of new facilities. The SG suggests that addressing the above issues be the focus of strategies designed to retain a larger number of faculty. Interestingly, the possible resolution of these issues seems to be in the immediate domain of the Administration and its policies.

Finally, concerning the net gain of 23 Ph D's, the Administration is asked to provide a list of those professors and their departments. This will allow the Student Government to verify and further review this issue.





10.

The SG can appreciate the Administration's stance on the expenses of living and working in the city since it affects everyone, staff and student alike; similarly, the SG would like to reiterate that securing external sources of financing can help to counterbalance this shared financial strain.




SG kindly asks You as a KIMEP Council Member and/or as an important administration/faculty office holder to produce comments on this report.

Your observations are most welcome and critical to Student Government.

Electronic format in Word file is attached for printout for comfortable reading.